India: Why Hillary stopped in West Bengal? FDI in retail

India: Why Hillary stopped in West Bengal? FDI in retail

Hillary Clinton addresses the media during a joint press conference in New Delhi on July 19, 2011.

If you're wondering why US Secretary of State Hillary Clinton stopped in Kolkata before meeting with the Indian prime minister in New Delhi later this week, here's a heads up.

West Bengal chief minister Mamata Banerjee, whose Trinamool Congress is essential to the survival of Manmohan Singh's United Progressive Alliance government, was the main roadblock that stopped the Indian PM from implementing his decision to open up the so-called multibrand retail sector to foreign direct investment from companies like Walmart.

Doubtless, it was a wasted trip. Banerjee, known here as "Didi" (or big sister), is not known for succumbing to flattery or protocol when it comes to negotiations. It will take some serious money on the table to convince her to change her position. And her leftist, pro-farmer stance (ill-considered or not) makes her a dogged opponent of a reform that many here see as the thin end of the wedge for increased globalization of agriculture. (Proponents say that companies like Walmart would bring massive infrastructure investments, eliminating much of the waste in India's agricultural sector, and also create more jobs in the formal economy, where workers receive the benefits of the minimum wage law and other legal protections).

Late last year, Singh's cabinet approved a plan to allow FDI in multibrand retail, but resistance from Banerjee's Trinamool Congress, as well as the opposition BJP and other non-coalition parties, forced Singh to put the plan on hold.

As GlobalPost reported earlier, Clinton is in India in part to push for further action against Iran, while India hopes to get some breathing room on its continued oil purchases, despite US and European sanctions on trade with Tehran.

On Monday, Clinton urged India to reduce its imports further, saying that it could be "devastating" for the world if Tehran developed a nuclear bomb, the Hindustan Times reported. "India... is certainly working towards lowering purchases of Iranian oil. We commend the steps they have taken thus far. We hope they will do even more," the paper quoted her as saying.